If you’re like most business builders, you probably don’t love doing your bookkeeping and working on your tax dues.
You’d rather focus on what you do best – growing the company, bringing out new services and interacting with customers and employees. Even if you’re running a one-person micro-business; an accounting solution can help you streamline all the paperwork and number crunching so you can focus on the really important stuff.
There are many other benefits – from generating financial reports to complying with SARS’s requirements. It’s not expensive anymore, thanks to Cloud-based (online) accounting packages that offer a small monthly subscription fee.
Here are five questions to ask yourself if you haven’t yet invested in an accounting solution.
1. Are you struggling to track your cash flow, income and expenses?
Many entrepreneurs use paper records and their bank statements to keep track of the flow of money into and out of their businesses. Not only is it time-consuming, but it makes it hard to keep track of payments expected, outstanding bills, and the company’s precise, up-to-the-minute position with income, expenses, assets and liabilities.
With the right accounting package, you can generate a range of financial reports with a swipe on your mobile device or a click of the mouse. You can track sales performance, see which of your product lines are profitable or not, generate forecasts and budgets, and easily call up profit and loss statements.
2. Are you spending a lot of time filing financial records and doing your books?
Business owners without accounting solutions know the tax year-end ritual of printing out bank statements, digging paper bills and invoices out from the shoeboxes, and spending hours totalling everything up.
Either way, it amounts to wasting days of your time each year that you could be out selling to customers or doing billable work. Or you could be spending money you could invest elsewhere in your business to pay someone else to do all your tedious and time-consuming paperwork. An accounting package gives you one place to keep your accounting records – and they’ll be accurate and up to date.
3. Is your accountant asking you to invest in accounting solutions?
If your accountant tells you that you need an accounting solution, take heed. The accountant is probably billing you heavily for doing a lot of manual work on your behalf; he or she may also be concerned about your ability to produce accurate financial records in a timely fashion.
With an online accounting solution, you and your accountant can work on the same set of books at the same time from anywhere in the world. You can be processing your invoices, while your accountant is busy running reports, for instance. There’s no more need for the accountant to come to your office for some simple paperwork.
4. Are you struggling to stay on top of issuing and paying invoices?
Do you spend a lot of time each month generating invoices for your customers and keeping track of your purchases from, and payments to, suppliers and service providers? With the right accounting package in place, you can quote from the accounting solution and then generate a customised, professional-looking invoice when it’s time to bill. You should be able to easily create recurring invoices quickly and easily for each customer that needs to pay you the same amount each month. You’ll also benefit from features that make it easier to track your own creditors.
5. Do you find recons to be a pain in the neck?
Doing manual reconciliations is not only slow and inefficient, it is also prone to human error. With the right accounting solution, you can link your online banking account to your financial solution and each day your accounting records will be updated automatically.
By accepting credit card payments online, your customers can pay you and the payments will be automatically reconciled when you import your bank statement. Even better, you can link your payroll, accounting and payment solution so you no longer need to recon your accounting package with your salaries and wages.
Jeremy Alderson-Smith is the Director of the Accountants Division Africa and Middle East at Sage.